Globalfoundries and ON Semiconductor

Semiconductor foundry company Globalfoundries is set to sell its 300mm Fab 10 plant to ON Semiconductor (NASDAQ:$ON) in a $430 million deal.

The 300mm FAB 10 plant, based in East Fishkill, New York, was brought into the Globalfoundries system in October 2014 in an agreement with IBM. The news of its sale to ON Semi marks Globalfoundries’ largest fab plant sale in company history.

Globalfoundries Pivots to Diversify Fabs

The sale of Fishkill’s 300mm fab is part of Globalfoundries’ push since late last year to step away from cost-intensive specialization. The Albany, New York fab—a one and a half hour drive from Fishkill—faced mass layoffs at the time. It was part of the company’s move away from 7nm architectures last August.

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Globalfoundries is to continue manufacturing its 300mm fab for ON Semi until 2022.

“ON Semiconductor is an ideal partner for Globalfoundries and this agreement is a transformative step in our journey to build Globalfoundries into the world’s leading specialty foundry,” said Tom Caulfield, CEO at Globalfoundries.

The company still has three other at-scale 300mm fab sites.

ON Semi Moves Into 300mm

ON Semi gains an important architecture and technical support through the ownership transfer, with development and technology license agreements in place as part of the deal with Globalfoundries.

ON Semi also benefits from the transitional nature of the deal, which is designed to encourage the company’s stable conversion of wafer processes from 200mm to 300mm.

“ON Semiconductor will also have immediate access to advanced CMOS capability including 45nm and 65nm technology nodes.” the press release read.

Keith Jackson, President and CEO of ON Semi, spoke highly of the deal.

“The acquisition adds additional capacity over the next few years to support growth in our power and analog products, enables incremental manufacturing efficiencies, and accelerates progress towards our target financial model.”

As ON Semi diversifies and Globalfoundries shifts corporate objectives with the Fishkill, New York transfer, global fab development continues outside of the U.S. Recently, China’s 2019 SEMICON exhibited more fab projects for 2020 than currently exist in any other region.

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